National Unemployment Rate Falls to 7.4%

The BLS ("Bureau of Labor Statistics") released the July jobs report earlier today. According to the BLS, the US economy added a total of 162,000 non farm payroll jobs in July, while the national unemployment rate dropped from 7.5% to 7.4%.

The 162k number was lower than the consensus estimate of 185k, which resulted in the markets gapping down following the release of the report. The national unemployment rate, on the other hand, continues to tick lower.

The jobs miss, coupled with the Federal Reserve's downgrading of US economic growth earlier in the week from "moderate" to "modest", has many people thinking that the Fed will likely have to push back the start of their tapering plan to 2014.

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Let's break down the July employment numbers a bit.

As mentioned, the US economy added 162,000 nonfarm payroll jobs in July. Total nonfarm payroll employment was revised lower in both May (+195k to +176k) and June (+195k to +188k).

The national unemployment rate ticked lower in July from 7.5% to 7.4%, and is currently sitting at its lowest level since the tail end of 2008.

The civilian noninstitutional population increased by 204,000 to 155,798,000 in July. The civilian noninstitutional population consists of Americans aged 16 and older who are currently not in an institution (jail, mental hospital) or an active member of the Armed Forces.

The civilian labor force, which consists of members of the civilian noninstitutional population who are currently employed or actively looking for work, decreased by 37,000 to 155,798,000 in July. Divide the civilian labor force by the civilian noninstitutional population and you are left with a labor force participation rate of 63.4%, which was down slightly from the month before.

There were a total of 144,285,000 employed Americans (based on the BLS definition of "employed") in July, up 227,000 from the month before. The number of unemployed, on the other hand, dropped 263,000 to 11,514,000. These numbers resulted in the unemployment rate dropping from 7.5% to 7.4% in July.

The number of people "not in labor force" increased 240,000 to 89,957,000 in July. These are people who are not considered to be employed or unemployed - people that could include those who have given up on finding a job or those who have part-time work but want full-time jobs.

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The unemployment rate for men over the age of 16 years held steady at 7.0% in July, while the unemployment rate for women over the age of 16 years dropped from 6.8% to 6.5%.

Finally, let's look at the number of unemployed by duration of unemployment in July: